The global financial crisis gave economists pause for thought about what should be the future of macroeconomic policy. We have devoted much of our thinking to this issue these past three years, including how the many policy instruments work together.
The interactions between monetary and macroprudential policies, in particular, remain hotly debated. And this year’s IMF Annual Research Conference is an important opportunity to take that debate another step forward.
Looking back, it is striking how many papers from last year’s conference—on post-crisis macroeconomic and financial policies—have been so immediately relevant to events on the ground. Just to give you an example: the paper on fiscal space is obviously front and center in the policy debate on the European sovereign crisis, the United States’ budget, and challenges faced by advanced country governments more generally.
This year’s topic—monetary and macroprudential policies—is equally relevant. It goes to the core of central banks’ mandates, and their role in achieving macroeconomic and financial stability. The financial crisis triggered a fundamental rethinking of these issues, but much research, both conceptual and empirical, remains to be done. The conference provides an excellent opportunity to engage with prominent academics, policymakers and private sector practitioners. I hope the conference will contribute to expanding the frontier of knowledge on this topic. (more…)
Filed under: Economic research, Financial regulation, IMF, International Monetary Fund | Tagged: IMF, International Monetary Fund, iMFdirect, asset price bubbles, fiscal space, Financial regulation, asset bubbles, crisis prevention, financial stability, central banking, monetary policy, risk taking, financial institutions, IMF Jacques Polak Research Conference, financial risk, credit bubble, macroprudential policies, regulatory arbitrage, IMF Annual Research Conference, Hyun Song Shin, Mundell-Fleming lecture | 8 Comments »